Multifamily Rental Housing

The Family Housing Fund is committed to working with housing authorities, local government, and private partners to create meaningful access to housing for families region wide.

The Family Housing Fund shares the Minneapolis City Councilmembers’ goal of improving access to housing for families with Housing Choice Vouchers. Prohibiting discrimination by source of income is a fundamental value that we hold. The proposed ordinance will advance that value.

However, the proposed ordinance alone is not enough to expand and protect access to privately owned rental housing for families that hold Housing Choice Vouchers.

The purpose of the Quadel study, which was commissioned by the Family Housing Fund in partnership with Minneapolis Public Housing Authority (MPHA), was to offer local-market informed recommendations to improve mobility for families. In the spirit of continuous improvement, the study shows that there are administrative changes that should be considered to make the Housing Choice Voucher Program work better for families and improve the partnership with rental housing owners and managers.

MPHA has shown decisive leadership in providing information and access to complete the study and in accepting the findings. They have made a commitment to implement administrative changes. The Family Housing Fund’s goal is to support them in that work, and we encourage others to do the same.

Family Housing Fund Policy Position

The concept for rent certificates for low-income families was first pitched in the 1930s by the National Association of Realtors out of concern that subsidized public housing buildings would threaten the private real estate market (Desmond, 2016). Since then, the market has changed significantly—the demand for affordable housing substantially out paces the limited government resources to build housing. Today, the public-private partnership that was suggested during the Great Depression has grown to be a major federal housing program and the primary tool to provide low-income families with choice in where they live.

The federal Housing Choice Voucher (HCV) program supports about 35,000 households in Minnesota (Minnesota Housing, March 2015), ensuring that they are not one of the nearly 600,000 households that are housing cost burdened and facing related health and employment challenges (Minnesota Compass). The benefits of the HCV program to families and the market, however, are limited by the way program implementation has evolved over the last several decades.

In the past year, the Family Housing Fund (FHFund) has undertaken two bodies of work to optimize the HCV program locally, as a way to get more owners/managers to participate. First, the Owners/Managers Creating Opportunity (OMCO) project explored why some local owners/managers engage with the HCV program and others do not. The primary takeaway from the project was a need to enhance the partnership between public housing authorities (PHAs) and the property owners/managers. Secondly, the FHFund retained Quadel Consulting and Training on behalf of the Minneapolis Public Housing Authority (MPHA) to assess their HCV program administration and identify strategies to maximize resident choice. This assessment also identified a need to develop more collaborative relationships.

The focus in both of these reports on improving the public-private partnership is not a coincidence, and it is not a need isolated to Minneapolis or even the Twin Cities region. As all PHAs consider how to support family success by getting more owners/managers to participate in the HCV program, thus expanding access to housing choice, fitting the rental assistance program into a property owners’/managers’ business must be a central strategy.

To achieve this, the first order of business for the affordable housing network is to embrace their role in the HCV collaboration and make administrative changes that reflect the value of what property owners/manager bring to the partnership: a home. In his first month of leadership at MPHA, Executive Director Greg Russ has committed to advancing some of the recommendations from the assessment prepared by Quadel, and outlining a plan for future changes. This is a critical first step.

Recognizing low-income families’ housing choice challenges, Minneapolis Councilmembers Glidden, Warsame, and Goodman have proposed an amendment to the City’s Civil Rights Ordinance that will prohibit discrimination based on source of income. This is an important value that the FHFund and affordable housing network hold: a family should be able to rent a home regardless of whether they pay rent through government assistance or income from a job.

The Councilmembers’ and affordable housing network’s goal is to have more property owners/managers participate in the HCV program in order to expand low income families’ housing choices. And any steps that PHAs and the City take to improve access to affordable housing must include an intentional evaluative component to understand if the intervention is creating the desired change or if a course correction is necessary. However, the ordinance alone will not meet its goal because it does not help families and PHAs overcome the practical, administrative issues with the HCV program. The OMCO and Quadel reports offer a clear conclusion that improving the public-private partnership will move the system closer to this goal.

A mandate not to discriminate, without significant administrative changes first, is unlikely to establish housing choice for low-income families. PHAs, with the support of their cities, must make changes to the way they administer the HCV program, stimulating its fit and connection to the business of real estate. Once these changes are implemented, the community can codify its value of nondiscrimination by source of income.

Statement updated 3/21/17 12:57

The Owners/Managers Creating Opportunity Project is a strategic effort of the Family Housing Fund to increase landlord participation in the Housing Choice Voucher Program across the seven-county metropolitan area, especially in areas with low rates of poverty and high quality schools, in order to expand housing choice for low-income and working families. The Housing Choice Voucher program is one of the federal government’s major initiatives to serve very low-income families and is one of the more flexible resources communities have to meet unique affordable housing needs in their jurisdictions. The Owners/Managers Creating Opportunity project addresses a critical bottleneck in the complex process of a family utilizing a voucher: finding an owner of a unit that fits their needs that will accept it.

The initial phase of the Owners/Managers Creating Opportunity project, which took place from January to February 2016, consisted of a data collection process to understand the experience of larger owner/managers who operate properties in low poverty areas with the Housing Choice Voucher program. It also included conversations with public and private stakeholders to understand what is currently being done to educate owners, expand participation, and what gaps might be filled by the Owners/Managers Creating Opportunity project in Phase II.

The owners/managers who participated in the interviews and focus groups expressed a deep desire to see the Housing Choice Voucher Program succeed. Many of them conveyed heartfelt accounts of having seen the program serve as a bridge out of poverty for working families. To enable the Housing Choice Voucher program to best serve families, families must have access to a variety of housing choices; in order to provide choice, owners of properties across the region must participate in the program. This research highlights three areas in which the Family Housing Fund and its partners can influence the number of owners that participate in the program:

Partnership: Above all else, Public Housing Authorities (PHAs) must authentically partner with property owners/managers. PHA programming cannot succeed without the participation of property owners/managers throughout the region.

Discretionary Policies: While HUD sets most of the Housing Choice Voucher program requirements, PHAs have some discretion on local administration of the program. The data collected through the Owners/Managers Creating Opportunity project indicates that there are two areas of discretion that are particularly important to cultivating positive relationships with the landlords and creating choice for families.

Inspections: While inspections are an important necessary part of providing residents with clean, safe place to live, there are opportunities to work with owners/managers to improve the process. One solution is to provide the inspection criteria ahead of the actual inspection. Giving owners/managers a sense of what they will be judged on would allow them to be even more prepared and would likely decrease the rate of failure and re-inspection, thus saving owners and inspectors time and money.

Several owners/managers also proposed decreasing the frequency of inspections for managers with a proven track record of success. New HUD regulations give PHAs the discretion to inspect every year or every two years. Less frequent inspections could be a powerful incentive for improving property management, while making participation in the program less burdensome.

Exception Rents: When each PHA sets its own rent payment standards they must balance the number of families they can reasonable serve with the funds available from HUD because the local program administration is bound both by a maximum caseload and a capped federal reimbursement. If rent payment standards are low to maximize the number of people served, voucher holders may not be able to rent in certain areas where there is a slightly higher fair market rent, even if the owner/manager were willing to accept the voucher. This limits locational choice for families. In order to create more opportunity for choice for families, some PHAs have defined areas with exception rents within their jurisdiction—meaning if a voucher holder would like to rent a unit in that area, the PHA payment standard is slightly higher. In addition to providing choice for families, matching the payment standards to the fair market rent in the area acknowledges the value of owners/managers business.

Resident accountability: Owners/managers want to know that residents will be held accountable. Following best practices of agencies, like not paying out vouchers at a new unit until damages are paid to the previous owner/manager, will reassure those owners/managers that there are incentives for responsible resident behavior.

Acknowledgements

The Family Housing Fund wishes to thank those who generously shared their time and expertise. The Family Housing Fund is especially grateful to the Minnesota Multi Housing Association, including Mary Rippe, President; Lisa Marvin, Board Chair; Todd Liljenquest, Director of Government Relations; and Marty McDonough, Director of Municipal Affairs.

The Family Housing Fund is pleased to announce a new partnership with long time partners Center for Energy and Environment, Neighborhood Energy Connection, Minnesota Multi Housing Association, Greater Minnesota Housing Fund, and Elevate Energy. The FHFund has worked with these partners in the past, but the new One Stop Partnership for Multifamily Housing intends to take advantage of each partner’s strengths to lower utility bills in multifamily properties by developing a one-stop, easy-to-use energy-efficiency program tailored for the multifamily sector.

Angie Skildum, the Family Housing Fund’s Multifamily Policy and Portfolio Director, notes, “Starting today, this partnership allows each partner to immediately work smarter by benefiting from each other’s shared experience and relationships. By fostering even closer collaboration, our multifamily work together will be stronger than the sum of its parts. It’s a partnership born of necessity; from our perspective, an effort of this level without collaboration probably wouldn’t be sustainable over the long term for Minnesota’s families.”